Late trains could force railroads to give up high-speed rail grants

Thursday

Jun 17, 2010 at 12:01 AMJun 17, 2010 at 5:15 PM

Freight railroad companies are balking at federal demands that they either pay for infrastructure upgrades to ensure high-speed passenger trains run on time or pay back billions of dollars in federal grants for high-speed rail if Amtrak trains fall behind schedule.

Bruce Rushton

Freight railroad companies are balking at federal demands that they either pay for infrastructure upgrades to ensure high-speed passenger trains run on time or pay back billions of dollars in federal grants for high-speed rail if Amtrak trains fall behind schedule.

Included in the grants is more than $1.1 billion to pay for high-speed rail between St. Louis and Chicago via Springfield. The Union Pacific railroad owns the right-of-way, and no project can proceed without the railroad’s permission.

With $8 billion of grants in play, the federal government has never before made such a massive investment in rail infrastructure, much of it privately owned. In the case of the St. Louis-Chicago route, where the state wants to move passengers between the cities in less than four hours, the Union Pacific is forecasting an increase in freight traffic that could result in crowded tracks.

Under grant guidelines published last month by the Federal Railroad Administration, freight carriers could be forced to repay federal grants if passenger trains running on their tracks don’t meet schedule targets. Alternatively, freight companies could pay for improvements to accommodate passenger trains or make operational changes to ensure passenger trains aren’t delayed.

FRA spokesman Robert Kulat said the agency is sticking by the guidelines.

Is the FRA concerned that railroads might refuse to allow high-speed passenger trains on their tracks if freight carriers could be required to make additional investments or re-pay grants?

“You’ll have to ask the railroads that,” Kulat answered. “I think the whole thing’s been overblown. They understand where we’re coming from.”

Rail groups object

Several freight rail entities, including the Association of American Railroads, have objected to financial penalties if federal regulators find that passenger trains are delayed because freight companies don’t give priority to Amtrak. When the FRA was developing performance standards for passenger rail that included financial penalties for the private sector if Amtrak trains are delayed, the Association of American Railroads warned that such rules could result in private rail companies blocking additional passenger rail service.

The FRA dismissed that argument in standards published May 12 in the federal register.

“The (standards) are not intended to deter future Amtrak service; rather they are to lead to improvements in whatever Amtrak service is offered,” regulators wrote.

Mark Davis, Union Pacific spokesman, did not reply to an email asking whether the railroad would go forward with the Chicago-St. Louis project if the FRA doesn’t change guidelines calling for grant re-payment or additional private investment if passenger trains are delayed. He did write that the guidelines are preliminary.

“We have a number of issues with these guidelines, and we made our concerns known to DOT (the Department of Transportation) and FRA,” Davis wrote. “Our discussions are constructive, and everyone remains committed to the goal of advancing the President’s high-speed rail program.”

After a June 9 meeting with railroad executives, U.S. Secretary of Transportation Ray LaHood predicted the government will resolve its differences with the freight carriers within two weeks.

“I said to them, this is the president’s and vice-president’s vision, and we need to get moving on it,” Lahood told Crain’s Chicago Business. “We’re going to have some very intense meetings here for the next couple weeks so we can get some agreements in place.”

Most confident of resolution

U.S. Sen. Dick Durbin is confident the parties will work out their differences, said Christina Mulka, Durbin spokeswoman.

In a prepared statement, Josh Kauffman, spokesman for the Illinois Department of Transportation, said the state is a partner with the FRA in negotiations with freight railroads to start construction and protect taxpayer interests.

Richard Harnish, executive director of the Midwest High Speed Rail Association, said he believes the government and the railroads will find a solution.

“This is the first time there’s ever been a national (performance) standard that’s tried to be developed,” Harnish said. “I’m excited it’s a high-priority issue for the president. And I’m confident it will be resolved.”

But Kristina Rasmussen, executive vice president of the Illinois Policy Institute, a conservative think tank that opposes federally funded high-speed rail, said freight rail companies and taxpayers both should be wary.

“If they (freight rail companies) accept the conditions, they’d be putting themselves on the hook for Amtrak’s poor performance record,” Rasmussen wrote in an email. “What happens when they refuse to shoulder mounting costs? Once again, taxpayers will be left to pick up the tab.”